Out of the Gate: Genzyme falls on Myozyme approval delay

The company reduced its 2008 forecast as a result. Shares of Cambridge, Mass.-based Genzyme Corp. shed $1.59, or 2.2 percent, to $72.50 in morning trading.

Myozyme is designed to treat Pompe disease, a genetic disorder that reduces muscle function. The FDA has approved the drug when it is made in a 160-liter bioreactor, but wants Genzyme to submit a new application for a version made in a 2,000-liter bioreactor.

Analysts said the drug was scheduled for approval in May.

Genzyme cut its 2008 profit forecast to $2.65 per share, and lowered its revenue forecast to a range of $275 million to $285 million. Previously, the company expected to earn $2.75 per share on $320 million to $330 million in revenue.

Goldman Sachs analyst Meg Malloy cut her price target to $86 per share from $93, predicting weaker sales of Myozyme through 2010. Other analysts said the ruling will only affect the company's 2008 revenue.

Baird analyst Christopher Raymond said that although the news is bad for Genzyme, but the ruling helps define the approval process for second-generation biologic drugs like Myozyme, which will have an impact on the entire biotech sector.